Sub-saharan investment returns are looking up

Africa’s investment environment is reviving, with a continuing and steady improvement in the trade-off between risk and reward. File photo: Hasan Jamali.

CAPE TOWN - Africa’s investment environment is reviving, with a continuing and steady improvement in the trade-off between risk and reward, according to the third edition of the Africa Risk-Reward Index from specialist risk consultancy Control Risks.

After several years of political and economic turbulence, with the weakest growth since the early 1990s, the report projects an accelerating resurgence in growth in sub-Saharan Africa to the end of the decade, which will see strengthening investment returns versus risk.

Gross domestic product growth in the region is forecast to climb to 3.7% next year, after picking up to 2.9% this year from 2.6% last year and an anaemic 1.1% in 2016. By 2020, economic growth in sub-Saharan African should reach a buoyant 4.3%.

Crucially, the index report highlights that the recovery in sub-Saharan Africa’s outlook is not being driven by the region’s major economies, Nigeria and South Africa.

The third edition of the index takes into account the recent and upcoming elections in Congo, Nigeria and Gabon, and their potential impact. It also explores several smaller markets for investors, considering the outlook for Uganda and Rwanda.